Daily Archives: January 30, 2014

Tesco announces plans to open 40 new skips across country

Worth a reblog!

Pride's Purge


Tesco has announced plans to open 40 new skips across the UK in a bid to break Iceland’s lead in the relatively new starving customers market.

The supermarket retailer announced Wednesday it will be adding another 40 new skips across the country, with most of the locations in deprived areas such as the north of England, Scotland and Wales.

The launch due in the first half of 2014 will see Britain’s biggest supermarket go head-to-head with other high street retailing giants as competition in the desperately malnourished sector widens.

The ambitious new expansion project also includes plans for the retailer to expand its own brands of out-of-date food staples as well as develop a wider range of rotting and putrid fresh grocery products to be thrown away.

Several new skips will open in Liverpool, Glasgow, Cardiff, Birmingham and Manchester with expansion of existing skips at sites in other deprived…

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Why Governments Can’t Choose to Run Balanced Budgets.

It is very difficult for many people to get their heads around the idea that the Government don’t have to run balanced budgets. It is even harder for those same people to accept that it’s usually not even possible anyway. It’s so counter intuitive, with regard to their own experience, that they’ll often just flatly refuse to accept a reasoned explanation. “If the Government only spent what it first took in taxes then the budget would be balanced.” would be a typical comment. End of discussion.

Many also don’t like the idea that the money supply needs to increase with time . In their minds, once a country has been issued  with its ration of money then that’s it. It should manage on that for ever. The question of who issued the money in the first place is one which is much too difficult to think about.

The UK and US money supplies have increased almost linearly with time for the last several decades regardless of the party of government of the day. So it’s a clearly observable fact that is what happens in real economies. The private banks play the major part in increasing the money supply, but Government needs to play its part too. But it should be noted that it is only a part. Most money in the economy is the creation of the private banking sector.

A government deficit is  necessary to allow individuals and companies to save. For every borrower there has to be a lender and vice versa. Savers are lenders. That means that someone has to borrow it from them. If the non-government sector are net saving then the government sector has to be a net borrower. ie it recycles the savings via the sale of bonds which it then spends back into the economy.

The non-government sector also represents overseas sellers of goods and services. Both Britain and the US generally are happy to run their trade at a deficit to the rest of the world. That deficit is effectively the rest of the world saving £ sterling or US$ treasury securities. Money  drains out of the US and UK economies as those net imports are paid for. The money has to be replenished by the UK and US Governments selling securities into the market and spending that money back into their economies. In other words: by running  budget deficits.

So no Government can, in a free society, just choose to run a balanced budget. A balanced budget is only possible if the private sector, in aggregate, chooses  not to net save, and also chooses  not to purchase more from abroad in imports than it sells abroad as exports. Or, if like Germany, the savings of the private sector are offset by a large export surplus , currently about 7% of GDP, then it is possible, as they do, to run a balanced budget. For Germany the numbers add up and they can do this without any real problem. If the UK or USA tried to do the same thing without addressing the trade question they would very quickly crash their economies – exactly as has happened in Greece and Spain.

See also: https://petermartin2001.wordpress.com/2014/03/11/an-economic-quiz/